Protocol

If after the signature of this Convention Slovenia or the Netherlands would introduce a general tax on capital, upon request of a Contracting State discussions will be held as soon as possible with a view to the application of this Convention to such taxes on capital.

In case an entity that is treated as a body corporate for tax purposes is liable as such to tax in a Contracting State, but the income of that entity is taxed in the other Contracting State as income of the participants in that entity, the competent authorities shall take such measures that on the one hand no double taxation remains, but on the other hand it is prevented that merely as a result of application of the Convention income is (partly) not subject to tax. To determine whether this is the case, the tax levied on the income of that entity is deemed to be tax levied on the income of the participants in that entity, in proportion to their participation in the capital of that entity. Insofar necessary, it may also, in addition, be determined that each participant, in proportion of his/its participation in that entity, may credit the tax levied on the income at the level of that entity (including possible withholding tax thereon of third States), with the tax that he/it is due on the same income. Furthermore, the State of residence of that entity might refrain from possible taxation (up)on distribution of profit of that entity to the participants.

It is understood that rights to the exploration and exploitation of natural resources shall be regarded as immovable property located in the Contracting State to whose seabed — and subsoil thereof — these rights apply, and that these rights are regarded as assets of a permanent establishment in that State. Furthermore, it is understood that the aforementioned rights include rights to interests in that exploration or exploitation or benefits from assets that arise from that exploration or exploitation.

In respect of paragraphs 1 and 2 of Article 7, where an enterprise of a Contracting State sells goods or merchandise or carries on business in the other Contracting State through a permanent establishment situated therein, the profits of that permanent establishment shall not be determined on the basis of the total amount received by the enterprise, but shall be determined only on the basis of that portion of the income of the enterprise that is attributable to the actual activity of the permanent establishment in respect of such sales or business. Specifically, in the case of contracts for the survey, supply, installation or construction of industrial, commercial or scientific equipment or premises, or of public works, when the enterprise has a permanent establishment, the profits attributable to such permanent establishment shall not be determined on the basis of the total amount of the contract, but shall be determined only on the basis of that part of the contract that is effectively carried out by the permanent establishment in the Contracting State where the permanent establishment is situated. The profits related to that part of the contract which is carried out by the head office of the enterprise shall be taxable only in the Contracting State of which the enterprise is a resident.

Payments received as a consideration for technical services, including studies or surveys of a scientific, geological or technical nature, or for consultancy or supervisory services shall be deemed to be payments to which the provisions of Article 7 apply.

In respect of paragraph 1 of Article 9, it is understood that the fact that associated enterprises have concluded arrangements, such as costsharing arrangements or general services agreements, for or based on the allocation of executive, general administrative, technical and commercial expenses, research and development expenses and other similar expenses, is not in itself a condition as meant in that paragraph.

Notwithstanding paragraph 5 of Article 10, it is understood that the term dividends also means income from debt-claims provided that the law of a Contracting State subjects this income from debt-claims to the same taxation treatment as income from shares according to a combination of the following criteria:

Where tax has been levied at source in excess of the amount of tax chargeable under the provisions of Articles 10, 11 or 12, applications for the refund of the excess amount of tax have to be lodged with the competent authority of the State having levied the tax, within a period of five years after the expiration of the calendar year in which the tax has been levied.

It is understood that income received in connection with the (partial) liquidation of a company or a purchase of own shares by a company is treated as dividends and not as capital gains.

Notwithstanding the provisions of paragraph 2 of Article 12, it is understood that Slovenia shall not levy a tax on royalties paid to persons, not being individuals, for a period of three years from the date Slovenia introduces a withholding tax on such royalties.

The competent authorities of the States may also agree, with respect to any agreement reached as a result of a mutual agreement procedure as meant in Article 25, if necessary contrary to their respective national legislation, that the State, in which there is an additional tax charge as a result of the aforementioned agreement, will not impose any increases, surcharges, interest and costs with respect to this additional tax charge, if the other State in which there is a corresponding reduction of tax as a result of the agreement, refrains from the payment of any interest due with respect to such a reduction of tax.

With respect to the Netherlands Article 26 will, for political subdivisions or local authorities, not be applicable to other taxes than those covered by this Convention, until the national legislation of the Netherlands contains a juridical basis therefore in line with the 2000 OECD model.

IN WITNESS whereof the undersigned, duly authorized thereto, have signed this Protocol.

DONE in duplicate at Ljubljana this 30th day of June 2004, in the Netherlands, Slovenian and English languages, all texts being equally authentic. In case of divergence between any of the texts, the English text shall prevail.